Enough with the drama – Nintendo isn’t dead just yet

Shares of Nintendo were hammered early Monday morning on the Tokyo Stock Exchange, down as much as 18% following Nintendo’s admission on Friday that the Wii U is indeed a flop. Nintendo confirmed that it will report its third consecutive annual loss and it slashed its 2014 Wii U sales forecast by a jaw-dropped 70% from from 9 million units to just 2.8 million. In other words, the Xbox One and PlayStation 4 each sold more units during their first month and a half on the market than Nintendo expects the Wii U to sell all year in 2014. But by the end of Monday’s trading session in Japan, Nintendo’s stock had recovered to close at 13,745 yen, down just 6.15% on the day, as panic subsided and investors acknowledged the fact that there’s still plenty of fight left in Nintendo.

It may indeed be too late to salvage the Wii U. Not even the highly anticipated release of “Super Mario 3D World” and the recent $50 price cut on the Wii U console itself was enough to bolster Nintendo’s holiday quarter. The continued success of Nintendo’s portable consoles may also delay Nintendo’s entry into the world of smartphone and tablet gaming, or it may prevent it completely. But one industry watcher thinks the drama in the digital media suggesting that Nintendo is dead is way off base, and that the company might still have a bright future ahead of it.

“In the near-term, Nintendo does have a problem on its hands with the Wii U,” Forbes contributor Erik Kain wrote in a recent column. “As much as I enjoy the console personally, I think it’s safe to say that Nintendo has missed in a very big way. There will be no repeat of the Wii’s success. The casual gamer still exists, but they’ve largely moved on to the much more casual smartphone/tablet market. But the casual gamer isn’t Nintendo’s only demographic, or at least it doesn’t have to be. Nintendo can still appeal to the ‘core’ gamer without abandoning kids and families. That means going beyond Mario, not simply spreading Mario out over myriad other devices.”

Kain believes launching Mario games on iOS and Android will cut the profitability of its game sales despite opening its titles up to a wider audience. More importantly, it will without question eat into its portable console sales.

So instead of going down this risky path, Kain believes Nintendo should make its next home console more capable and do more to appeal to hardcore gamers instead of just casual home gamers. “The number one reason Nintendo ought to stay in the hardware market is the profitability and quality of its first-party games,” he wrote. “But Nintendo needs to do more to bring third parties to the table also.”

By building a more capable and competitive console but still retaining its own focus on family games, Kain thinks Nintendo could attract both types of gamers with a single console and find success in the living room once again.